The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Untitled design (8)
FIRST RELEASE TICKETS ON SALE FOR URBANITY-25 CONNECTING PROPERTY LEADERS ACROSS THE ASIA PACIFIC
FIRST TICKETS ON SALE FOR URBANITY-25 WHERE THE PROPERTY INDUSTRY CONNECTS
SEE DETAILSDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Partner Lab
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ResidentialTue 14 Apr 20

Impact on Property ‘Unclear’ as Unemployment Rate Hits 10pc

TUD+ MEMBER CONTENT
dc07444c-a1ab-4c4e-a22d-d6e55d2cc01c
SHARE
35
print
Print

Unemployment is expected to rise to its highest rate in almost thirty years, with new figures forecasting the rate to increase from 5.1 per cent to 10 per cent in the June quarter.

The latest treasury figures, released Monday night, said Australia’s unemployment rate could hit double digits for the first time since the “recession we had to have” of the early nineties.

Australia’s peak unemployment rate reached 11.2 per cent in 1992. It has hovered around 5 per cent and 6 per cent in recent years. And currently sits at 5.1 per cent.

While economic uncertainty, job insecurity and increasing restriction measures are likely to cause declines in real estate activity across the sector, the Reserve Bank of Australia said it was unclear how Covid-19 would impact property prices.

Coronavirus impact on property market ‘unclear’

Last week the Reserve Bank held its rate at 0.25 per cent.

In the central bank’s Financial Stability Review, it noted that Australia’s financial system enters this challenging period “in a strong starting position” with capital levels high, banks' liquidity position “improving considerably” in recent times, and noting that most households “now have substantial equity in their homes”.

“The economic downturn, uncertainty and social distancing are likely to result in very little turnover in the housing market,” the RBA said in the April update review.

“It remains unclear how this will affect residential property prices.”

▲ The coronavirus-induced downturn is expected to see Australia's unemployment rate nearly double by mid-year.


SQM’s managing director Louis Christopher expects the next month to be a telling time for the property market.

Last week SQM forecast residential prices could drop by 30 per cent from recent highs in one of its bleaker scenarios, with the most overvalued cities — Sydney and Melbourne — hit the hardest.

“The next 30 days will likely tell the story. It is very hard to judge it,” Christopher said.

Preliminary auction clearance rates fell below 30 per cent over the Easter long weekend according to CoreLogic. Withdrawn auctions increased to comprise 57 per cent of all reported results.

While Australia’s house prices remained positive through March, recording a 0.7 per cent rise, CoreLogic says recent market trends have become less relevant as we move into unprecedented uncertainty.

Treasurer Josh Frydenberg described the economic shock facing the global economy from Covid-19 as “far more significant than what was seen during the global financial crisis over a decade ago”.

“The exceptional measures taken to contain Covid-19 are having a major effect on economic activity and the global financial system,” he said.

▲ Frydenberg confirmed that the 10 per cent unemployment rate is expected when the figures for the June quarter are released. The unemployment rate currently sits at 5.1 per cent.


In its update, Treasury forecast that the unemployment rate would increase to 15 per cent, “in the absence” of the Job Keeper package, the $1500 fortnightly payment to workers of covid-19 impacted businesses.

The $130 billion package was passed in parliament last week.

More than 800,000 businesses have applied for the payment program, to date.

ResidentialAustraliaBrisbaneMelbournePerthAdelaideCanberrado not useReal EstateSector
ADVERTISEMENT
TOP STORIES
Exclusive

Gold Coast’s Greatest Moments Yet to Come: Evan Raptis

Phil Bartsch
7 Min
MODEL founder Rory Hunter HERO
Exclusive

‘It’s Massive’: On Mission to Prove BtR Green Equals Gold

Leon Della Bosca
8 Min
Potts Point Coliving EDM
Exclusive

Co-Living Shrugs Off Stigma as Overseas Money Moves In

Clare Burnett
6 Min
Bankstown cbd in Sydney NSW EDM
Exclusive

Breaking Delivery Crisis Chokehold on NSW’s Biggest Housing Market

Vanessa Croll
7 Min
Healthscope Hospital EDM
Exclusive

‘Once-in-a-Decade’ Opportunities Rise in Wake of Healthscope Collapse

Clare Burnett
7 Min
View All >
Sponsored

Innovation That Works: Solving Real-World Fitout Challenges

Partner Content
Rose Bay supersite EDM
Residential

How 12 Eastern Sydney Homes Became a $165m Supersite

Vanessa Croll
Fieldwork and MALA's rendering of the mixed-use project by MAKE next to Murrumbeena Train Station in Melbourne's southern suburbs.
Affordable & Social Housing

Murrumbeena Scheme Wins Minister’s Backing

Marisa Wikramanayake
After the council protested insufficient information, the planning minister has approved a housing project in an Activit…
LATEST
Interiors

Innovation That Works: Solving Real-World Fitout Challenges

Partner Content
3 Min
Rose Bay supersite EDM
Residential

How 12 Eastern Sydney Homes Became a $165m Supersite

Vanessa Croll
4 Min
Fieldwork and MALA's rendering of the mixed-use project by MAKE next to Murrumbeena Train Station in Melbourne's southern suburbs.
Affordable & Social Housing

Murrumbeena Scheme Wins Minister’s Backing

Marisa Wikramanayake
2 Min
Residential

Villawood Breaks Ground on Debut Redland Bay Project

Lindsay Saunders
2 Min
View All >
ADVERTISEMENT
Article originally posted at: https://theurbandeveloper.com/articles/coronavirus-impact-property-unclear-unemployment-rate-10pc